Project #90079 - Labor Economics Problem set

Answer the following questions and turn in your answers at the beginning of class on Tuesday Nov 3.  We will then discuss your answers.


1.     Why did the Chinese government end the One Child Policy?

2.     Draw China’s age pyramid for 2015.  Explain its shape.

3.     Draw China’s age pyramid for 2030, revised in light of the change in policy.  Explain its shape.

4.     China’s total fertility rate in 2014 was 1.55.  What do you predict it will be in 2016?  In 2020?  Explain your predictions.

5.     At what ages will the biggest changes in age-specific fertility occur?

China to End One-Child Policy, Allowing Families Two Children

BEIJING — Driven by fears that an aging population could jeopardize China’s economic ascent, the Communist Party leadership ended its decades-old “one child” policy on Thursday, announcing that all married couples would be allowed to have two children.

The decision was a dramatic step away from a core Communist Party position that Deng Xiaoping, the Chinese leader who imposed the policy in the late 1970s, once said was needed to ensure that “the fruits of economic growth are not devoured by population growth.”

For China’s leaders, the controls were a triumphant demonstration of the party’s capacity to reshape even the most intimate dimensions of citizens’ lives. But they bred intense resentment over the brutal intrusions involved, including forced abortions and crippling fines, especially in

The efforts to limit family size also led to a skewed sex ratio of males to females, because traditional rural families favor boys over girls, sometimes even resorting to infanticide to ensure they have a son.

The Chinese government eased its one-child policy in 2013, but the state news media reported on Thursday that Beijing was abandoning the policy completely.

Thursday’s announcement was the highlight of a party meeting at which President Xi Jinping sought to display his control over a flagging economy after a jittery summer of tepid indicators, deepening skepticism about official data and a tumultuous slide in the stock market.

Yet while the decision surprised many experts and ordinary Chinese, some said it was unlikely to ignite either a baby boom or an economic one. 

“Anything demographic, we always have to think in terms of decades in terms of long-term impact,” said Tao Wang, the chief China economist at UBS.   “It’s not about stimulating growth or consumption of baby powder next quarter or next year,” she said. “Will the birthrate go up? Yes. Will it somehow increase significantly? We don’t know.”

China eased some restrictions in the one-child policy in 2013, allowing couples to have two children if one of the spouses was an only child. But many eligible couples declined to have a second child, citing the expense and pressures of raising children in a highly competitive society.

The initial public reaction to the party leaders’ decision was restrained, and many citizens in Beijing who were asked whether they would grasp the chance to have two children expressed reluctance or outright indifference. Some, however, were pleased.

“Really, can you show me the news on your phone?” said Sun Bing, 34, the owner of a small technology store in Beijing, who had his 2-year-old son by his side.  “This is a good thing, and I’m very supportive,” he said. “I want to have a second kid in two years. But, of course, it’s not cheap to raise children.”

Yang Qing, a clothing designer in Hangzhou, a city in eastern China, said that she now wanted a second child, in addition to her 4-year-old son. “I always heard that people got fined for having more than one child, and they had to hide out and they will get caught,” she said. “Everyone was scared.”

But most people interviewed voiced misgivings. “Before I had my first child, I was hoping for the relaxation of the one-child policy,” said Chen Feng, 36, who works at a medical equipment company. “I changed my mind after I gave birth to my daughter.  It takes a lot of energy to take care of a child, and you want to make sure the child will have a good future,” she said. “So my husband and I have decided not to have a second child.”

China’s working-age population, those 15 to 64, grew by at least 100 million people from 1990 until a couple of years ago. But that expansion is petering out, and more people are living longer, leaving a greater burden on a shrinking work force. Now, about one-tenth of the population is 65 or older, and according to earlier estimates, that proportion is likely to reach 15 percent by 2027 and 20 percent by 2035.

Demographers and economists say the cost and difficulty of child-rearing are likely to deter many eligible couples from having two children despite the relaxed rules, Mu Guangzong, a professor of demography at Peking University, said in a telephone interview.

 “I don’t think a lot of parents would act on it, because the economic pressure of raising children is very high in China,” he said. “The birthrate in China is low and its population is aging quickly, so from the policy point of view, it’s a good thing, as it will help combat a shortage of labor force in the future. But many parents simply don’t have the economic conditions to raise more children.”

By May,about 1.45 million couples had applied to have a second child under the relaxed rules announced in late 2013, but that was only about 12 percent of the number eligible, disappointing demographers and policy makers who had hoped that the policy shift would do more to counteract the rapid aging of China’s population.

Now, the party leadership has acted more forcefully, apparently in the hope that a burst of children will replenish the nation’s work force and encourage more consumer spending.

The decision to replace the one-child policy with a “two child” one was among the few substantial changes announced during the four-day Central Committee meeting in western Beijing. A fuller summary of the five-year development plan is likely to be released in several days, and the full document will be issued next year.

The one-child policy took shape in the late 1970s, when Mr. Deng and other leaders concluded that China’s growing population threatened to stifle economic growth. The restrictions went into effect in cities, but in the countryside, many families continued to have two or more children. The government has also excused ethnic minorities from complying.

As the years went on, harsh official campaigns to fine and punish couples who violated the rules, and sometimes to force women to have abortions, became a source of public discontent.

Liang Zhongtang, a retired demographer who has advised Chinese officials on population policy since the 1980s and has long argued that they should relax the one-child policy, said the change had come too late to make a big difference in the country’s population trajectory. He said he had pushed for such a change since the 1980s.

“It’s not just a problem of whether you permit ordinary people to have one or two kids. It’s about returning their reproductive rights to them,” Mr. Liang said in a telephone interview from Shanghai. “In over 200 countries and regions around the world, which of them nowadays controls people’s reproduction like this?”

Subject Science
Due By (Pacific Time) 11/03/2015 12:00 am
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